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Planning is a feasible strategy and value is not subjective

Economic Value

  • Value is not the same thing as price. Price is a rough measurement of value, and value is that third thing of an exchange. For example, if eggs are traded for milk, the eggs must be equivalent to milk in some regard; there is value, though there is no price in this example.
  • While labor value is not the same as price, labor time can be used to obtain a rough estimate of prices, and the two concepts are linked in a way observable in the empirical world.
  • Labor is the necessary component for creating a product; this is what gives products value.
  • Subjective time preference does not exist in a vacuum. Your preferences depend on the context surrounding you. Since money is a measurement of value, using time preference to explain value results in circular reasoning because time preference is necessarily influenced by the amount of money someone already has.
  • Individual value, or use value, can only tell us what to charge and how to set a price, not what value actually is. Individual wants are influenced by price, so using this to explain value results in circular reasoning. For example, if a product costs $1, someone might buy it as a gag gift, but if it cost $50, the joke might not be worth it.
  • Mere subjective desire is worthless unless it's realized. You could want a house all you want, but unless you get the money to buy that house, your desire remains a desire. The obtaining of money cannot help but reference the labor process: you must enter the market with a product to sell or as a worker making or aiding in the production of those products.
  • The subjective theory of value is absurd when considered in terms of philosophical zombies. In an economy of P-zombies (hypothetical creatures that look and act like us but lack consciousness), there would be no value since there is no subjective desire; however, the economy would function like ours.
  • The only way to properly explain value is by taking labor into account.

Planning

  • The economic calculation problem, at best, only had relevance around the time Mises first conceived of it, as modern computing has made it a non-issue.
  • The model of planning assumed in the economic calculation problem is not the only way that planning has to take place. It assumes planning is done by a small group of people who make the final decision, which is unrealistic.
  • The masses being involved in planning would solve any problem of calculation. This would not simply be a poll of the masses, but their active involvement in the planning process.
  • Large-scale decisions similar to those required in planning already take place in capitalist societies. The bulk of intermediary goods are not allocated through the market but made to order. This is true of large machines such as hydroelectric dam turbines, which are ordered with very precise specifications. To create these, producers have to communicate with parts creators, resource harvesters, and shippers, outlining a basis for mass involvement in economic planning.
  • Even non-socialist economists have argued that economic calculation was not the downfall of socialist economies. Economist Brian Kaplan notes that there has been no natural experiment of a socialist economy suffering solely from a lack of economic calculation. Kaplan also points out that this argument is self-contradictory when made by Austrian economists, who insist that economic theory only provides qualitative laws, not quantitative ones. How could an Austrian economist then know, solely from economic theory, that the lack of economic calculation would be severe enough to make socialism infeasible?

Labor theory of value and exploitation

  • It's impossible for an employer to work harder than all their employees combined. Employees are hired because they produce more than they are paid.
  • While the labor theory of value entails that exploitation occurs, exploitation is not unique to the labor theory of value. For example, analytical Marxists have developed theories of exploitation based on choice and game theory.' Therefore, the concept of exploitation isn't solely based on the labor theory of value.
  • John Roemer's seminal work "A General Theory of Exploitation and Class," published in 1982, marked a significant departure from traditional Marxist approaches to understanding exploitation. Rather than relying on Marx's labor theory of value, Roemer employed rational choice theory and game theory to develop a new framework for analyzing exploitation in capitalist systems.
  • Game theory models allow us to analyze strategic behavior between capitalists and workers. In a prisoner's dilemma-like scenario, capitalists may choose to pay lower wages, knowing Workers can't ask for higher wages, leading to suboptimal outcomes for workers. This strategic interaction reinforces exploitation.
  • Rational choice theory helps us understand why workers accept low wages. If workers perceive little chance of improving their position or fear losing their jobs, they may rationally choose to accept lower wages, even if they feel exploited.